BAE will use a new accounting system for the first time when it presents half-year 2018 results.

The company said it had agreed with the trustee boards of its defined benefit pension schemes to increase annual payments by £15m to around £220m next year, as it looks to address a £2.1bn deficit across the schemes.

Deficit contributions will further increase in line with any percentage growth in dividend payments made by the firm.

"Under the new deficit recovery plans, these annual payments would subsequently fall by c£50m in 2022 and end in 2026," BAE said in a statement.

The next triennial funding valuation and review of contingency plans is set for 2020.

Analysts at UBS called the UK pension schemes update "very good" news, saying the completion of its pension review provided "solid relief" to cash and shares.

The firm has been in the headlines this week, after the impact of hefty restructuring at the company, involving a wave of potential job losses, was discussed at a meeting of the Defence Select Committee.

The FTSE 100 company said the cuts were necessary for BAE to remain competitive. It said there was not enough work stacked up in the pipeline to sustain jobs.

"The reality is that our workforce has got to match the workload that we have," said Bob Keen, BAE's head of government relations.

"I don’t think it would do any of our programmes a service to have people not being fully employed and not being as efficient as the company requires them to be."

However, Unite assistant general secretary Steve Turner, said the potential job losses were "devastatingly short-sighted in respect of the impact, not just on the jobs themselves, but on the skill content of those jobs, the communities that have supported these sites for generations and, indeed, our sovereign defence capability moving forward".

BAE representatives also said as a firm, and more broadly as a sector, it would be affected on customs and tax changes that could arise post-Brexit, but less affected than some firms operating in automotive or commercial aerospace.

"Where we are keen to ensure that Brexit continues to deliver for the UK is in the area of collaboration," Keen added.